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News Analysis

CityCenter Debuts in Las Vegas

Fingers Crossed as Long-Awaited CityCenter Debuts

CityCenter, the $8.5 billion joint venture of MGM Mirage and Dubai World, finally opened its doors last month, beginning with the 1,495-room condo-hotel Vdara on Dec. 1.

By mid-month, the 392-room Mandarin Oriental, the 500,000-square-foot Crystals shopping center and 4,004-room Aria hotel-casino also had debuted.

Whether the complex lives up to its promise remains to be seen, but the mere fact that such an ambitious project came to fruition, following some tumultuous times for its owners and the city in general, is a huge psychological boost for the city.

Even before Vdara began welcoming guests, positive news was coming in. More than 3 million people visited Las Vegas in September 2009, according to the Las Vegas Convention and Visitors Authority -- a 4.3 percent year-over-year rise, and the first monthly increase since May 2008. Thanks to a few large trade shows, convention attendance skyrocketed by 12.2 percent year-over-year in September, the first such increase since July 2008.

"It's too early to say we have turned around," noted a spokesperson for the LVCVA, "but we are optimistic looking forward. Booking for corporate events looks positive as we move further into 2010 and 2011."

Indeed, while average daily room rates and gaming revenues continued to decline, according to the LVCVA, better times are coming, if predictions from the 2010 Las Vegas Strip Forecast & Investment Guide come true. The report, published by the Global Gaming Group at real-estate company CB Richard Ellis, forecasts a 3 to 7 percent increase in overall Las Vegas Strip revenue in 2010. That number takes into account the impact of CityCenter as well as general economic factors, such as the stock market, which historically have affected Las Vegas.

"That should really improve investor sentiment," said Jacob Oberman, a casino consultant with CB Richard Ellis and co-author of the report. The guide indicates that revenue growth would be 2 to 4 percent even without the projected boost offered by CityCenter, but all of the new complex's rooms will come at a price. The authors pro­ject a revenue decline of 3 to 6.9 percent for Strip casinos that were in existence prior to October 2009.

"We also spoke to a fair number of corporate and incentive meeting planners in Las Vegas," Oberman added, "all of whom reported increased interest from groups over the past six months."